The Spanish retail and private banking operations and the investment management business to be sold include Lloyds Bank International S.A.U and Lloyds Investment España SGIIC.

As consideration, Lloyds will receive a 1.8% stake in Banco Sabadell, representing 53.7 million ordinary shares worth about £72m out of the Spanish bank's treasury holding.

In addition, Lloyds would get up to £17m in cash within the next five years depending on the performance of the sold assets.

The bank was also keen to promote its role in "supporting customers and the UK economic recovery."

"We are delivering real benefits for customers, colleagues and shareholders by investing behind our simple, UK customer-focused retail and commercial banking model, and are now further ahead in our plan to transform the Group, as reflected in the enhanced guidance for costs and capital we are giving today," said Horta-Osório.

Lloyds increased small to medium enterprise net lending by 4% in the last twelve months despite a market contraction of 4%.

It also added that it will "continue to address existing legacy issues" and that payment protection insurance complaints were falling in line with expectations.